Friday, July 02, 2010

Marcellus Shale Job Projections Bogus

I intended to write a rather rosy post about the natural gas market and the prospects for an energy boom in Western Pennsylvania. Then a post from Null Space streamed across Google Reader and blew a hole in all the optimism surrounding the Marcellus Shale play. The article about the scandal isn't what I would call damning, but a related story from the Associated Press gets to the heart of the controversy:

Michael Wood, research director for the Harrisburg-based center, said the issue is not so much with funding behind the study, as much as methods used by researchers.

As an example, the center has noted that the U.S. Bureau of Labor Statistics estimated there were more than 10,000 people directly employed by the industry in Pennsylvania.

A report last year from the Marcellus Shale Education & Training Center, at the Pennsylvania College of Technology in Williamsport — which is also affiliated with Penn State — estimated the number of full-time natural gas-related jobs in north-central Pennsylvania could more than double to between 3,200 and 5,400 positions by 2013, depending on the success of wells.

A study earlier this year from the state's Center for Workforce Information & Analysis estimated gas drilling jobs could grow 55 percent from 2006 to 2016 to more than 12,400 positions statewide.

"This is great. ... These are good paying jobs, but a lot different than the 200,000 jobs," Wood said.

I've heard from other sources that the 200,000+ jobs figure is more than a little dubious. And I've read a few quotes over the past week attempting to refute that current gains in the energy labor force are not skilled workers from Texas, Oklahoma, Colorado, and Wyoming. You can get a good sense of one side of the political battle here.

Laura Fisher, ACCD Senior Vice President of Special Projects, says this is one of the last federal stimulus grants awarded by the Department of Labor and "they are very supportive of proposals that will put people into jobs quickly."

41 awards totalling $125 million were made nationwide for community-based job training for high growth industries. The "ShaleNet" proposal received the largest grant.

Fisher says a key factor in winning the grant is that much of the Marcellus drilling is in rural areas where there is higher unemployment and low income levels and that meshes with the goals of the Labor Department in job creation.

Fisher says that 70% of the drilling workforce is not local...many of those workers are from Texas, Oklahoma and Wyoming where there is much more experience in shale drilling. She says that the drilling companies would actually prefer to hire local residents because it would be more cost effective.

There is a lot of posturing going on right now, but I doubt the Allegheny Conference on Community Development is looking to torpedo Pennsylvania's energy economy. Count me among those who support the heavier extraction tax proposal. Those lobbying in the interest of the drillers must resort to distorting the local windfall in order to make their case.

To bastardize a successful Ben & Jerry's campaign, what's big unconventional gas afraid of?

1 comment:

usefulcommunitydevelopment said...

Unfortunately it seems that economic development projects are all exaggeration all the time nowadays. Good work in finding some countervailing estimates.